Sugar production will exceed demand by 779,000 metric tons for the 2010-11 season that started in October on increased production in Thailand, according to the International Sugar Organization.
The estimate was up from a February forecast of 196,000 tons, the London-based ISO said in a statement today. Thailand’s cane output may expand to a record 94 million tons, with sugar output of about 9.6 million tons, according to the Office of the Cane & Sugar Board.
“Without the gigantic and unforeseen increase in sugar availability in Thailand, the 2010-11 world balance would show a deficit of more than 1 million tons,” ISO said in the report.
World production will be a record 167 million tons, up 5.7 percent from last season, while consumption will rise by 2.2 percent to 166.2 million tons, it said.
Global stockpiles will cover 33.8 percent of consumption in the current season, down from 34.6 percent in 2009-10 and the lowest in more than 20 years, ISO said. Supplies may exceed demand by 3 million tons in 2011-12, “putting further bearish pressure on world market prices,” ISO said.
Raw sugar prices have fallen 32 percent on ICE Futures U.S. in New York this year